Digital Garage, Inc.
3Q of FYE June 30, 2015 Financial Report2015.5.13

Investment Highlights
Record-high ordinary income of 4.3 B JPY(+75% YoY) in cumulative 3Q FY15
～ All business segments grew Sales and Op income YoY,New projects underway for the next 3 years ～Ⅰ

Incubation : Accelerating incubation ecosystem globally
 Investment balance grew to 10 B JPY through continued aggressive global investment. Overseas portfolio
performed strong exit
 Launched support for localization of leading US internet services in collaboration with Betaworks
 Formed capital and business alliance with Kodansha to distribute content globally and incubate new business

ⅡMarketing : Online Ads continue positive performance w/ improved profitability
 Revenue increased +10% YoY, Op income increased +31% YoY, 3Q Op income % rose to 7.9%
 ROI-focused performance ads continued to lead a significant growth Launched overseas promotion of apps for foreign visitors in Japan, developing cross-border system for online
adsⅢ

Payment : Scheme of arrangement to make econtext Asia Limited a wholly-owned subsidiary(henceforth SOA) was approved, payment business showed solid growth Planned to make econtext Asia Limited a wholly-owned subsidiary by acquiring the remaining shares fromthe outside shareholders Domestic growth led by convenience-store and credit card settlements due to growing e-commerce market
 Alliance with major service providers such as Rakuten, LINE, and Recruit to expand payment services
Copyright © 2015 Digital Garage, Inc. All Rights Reserved2

FY15.6 3Q (Cumulative) Consolidated P/L Summary
YoY Sales grew +9.9%, Ordinary income grew +75% to 4.3 B JPY〜 All business segments grew Sales and Op income YoY 〜

JPY in Millions

Net sales

Incubation
Marketing
Payment

Operating Income

Incubation
Marketing
Payment
Non-operating income

Investment profit on equity method

Foreign exchange gain
Non-operating expenses

Ordinary Income

Extraordinary income
Gain on change in equity
Income before income taxes
Income taxes

Net Income
EBITDAFY14.6 3Q

FY15.6 3Q

Cumulative Act

Cumulative Act

1

23,894
3,149
10,637
10,107
1,186
423
644
878
1,705
1,229
208
393
2,498
500
374
2,972
962
1,873
4,134

26,264
3,720
11,784
10,758
2,201
1,130
843
987
2,627
1,522689
435
4,393
2,369
2,301
6,667
2,275
4,079
8,016

YoY

FY15.6 Full Year
1Q-3Q%

AmountForecast+9.9+18.1+10.8+6.4+85.5
2.7 x
+31.0
+12.4
+54.1
+23.9
3.3 x+10.6
+75.9
4.7 x
6.1 x
2.2 x
2.4 x
2.2 x
+93.9+2,370+571+1,147+651+1,014+707+199+108+922+293+481+41+1,895+1,869+1,926+3,695+1,313+2,206+3,88240,0007,500
17,00015,500
4,500
3,600
1,100
1,450

66%
50%
69%
69%
49%
31%
77%
68%

6,70066%

5,200
11,00078%
73%

Note: Interest expense, depreciation, and amortization are added back to income before income taxes to calculate EBITDA.
Op income per segment is based on figures prior to elimination or group deduction.

Progress

Copyright © 2015 Digital Garage, Inc. All Rights Reserved

3

FY15.6 3Q Consolidated B/S Summary
JPY in Million

FY14.6

FY15.6 3Q

Difference

Reason for change / Remarks

Current assets

45,45558,568+13,113

Cash and deposits

24,29431,317+7,022

Receivables

8,596

11,112+2,515

889

3,269+2,380

8,063

8,734+670

Fixed assets

25,55429,406+3,852

Investment securities

10,644

13,990+3,346

Investment real estate

3,619

4,231+612

Goodwill

7,354

6,991-362

Total assets

71,00987,975+16,965

Current liabilities

25,461

34,884+9,422

Deposits

16,434

20,744+4,310

Payment segment related items

Short-term borrowing

3,690

9,046

+5,355

Transfer from Long-term borrowing

Deferred tax liability

1,264

1,314+50

Fixed liabilities

9,058

9,986+927

Long-term borrowing

8,841

8,901

+60

Total liabilities

34,51944,870+10,350

Net assets

36,48943,104+6,614

Shareholders' equity

27,76231,507+3,744Retained earnings

9,615

13,436+3,820

Accumulated other comprehensive income

2,679

5,074+2,394

Unrealized gains on securities

2,193

3,755+1,561

Minority interests

5,906

6,336+429

Liabilities / Net assets

71,00987,975+16,965

Money held in trust
Operational investment securities

Sales of stocks, etc
Payment segment related items
Payment segment related items
New investment, Mark-to-market for stocks
related to IPOs, etcIncreased investment profit on equity method,
Mark-to-market for listed stocks, etc

Estimated amount of tax for
Unrealized gains for securities w/ market value
Transfer of Long-term borrowing due within one
year to Current liabilities, Demand for working
capitalUnrealized gains after tax for securities withmarket value

Copyright © 2015 Digital Garage, Inc. All Rights Reserved4

Quarterly comparison of Consolidated Sales / Op Income
Achieved Sales 8.3 B JPY, Op income grew YoY exceeding the budget～ Hit record high Op income for cumulative 3Q ～（JPY in Million）【Net Sales】

FY14.6【Operating Income】

FY15.6

FY14.6

FY15.6
Copyright © 2015 Digital Garage, Inc. All Rights Reserved

5Quarterly comparison of Incubation Performance
Sales and Op income exceeded the budget. Investment balance grew to 10 B JPY～ Launched localization of leading US internet services in Japan in collaboration with Betaworks ～（JPY in Million）【Net Sales】

FY14.6【Operating Income】

FY15.6

FY14.6

FY15.6
Copyright © 2015 Digital Garage, Inc. All Rights Reserved

6Quarterly comparison of Marketing Performance
Growth gaining traction in ROI-focused performance ads～ Profitability improved for the three consecutive quarters after bottoming out
in the previous 4Q. Op income % recorded 7.9% in the current 3Q ～（JPY in Million）【Net Sales】

FY14.6【Operating Income】

FY15.6

FY14.6

FY15.6
Copyright © 2015 Digital Garage, Inc. All Rights Reserved

7Quarterly comparison of Payment Performance
Domestic growth led by convenience-store and credit card settlements
due to growing e-commerce market～ SOA to make econtext Asia Limited a wholly-owned subsidiary was approved
and the related costs were recorded ～（JPY in Million）【Net Sales】

FY14.6【Operating Income】

FY15.6

FY14.6

FY15.6
Copyright © 2015 Digital Garage, Inc. All Rights Reserved8

Topics : Progress of SOA to make econtext Asia Limited a wholly-owned subsidiary
Background and objectives regarding
stock purchase
Changes in external
environment

Benefits ofprivatization

Rapid growth in Asia’s e-commercemarket makes high valuations forinvestment / M&A targets

Enhance financing andinvestment capabilities byleveraging DG group’s financial
strengths

Yen’s rapid depreciation does not
represent the real businessperformance when reported in$ HK

Collaboration among groupcompanies,
quick decision making

Various listing regulations in HK
makes it difficult to executepromptlyImproved consolidated ROE
Enhanced shareholder returns

 Determined that reconstructing investment andstrategy in the Asian region with quick decision
making is necessary
 Planned to make econtext Asia Limited a whollyowned subsidiary by acquiring the remaining
shares (41.5%) from the outside shareholders

About econtext Asia
Company
nameHeadquarters

Business

econtext Asia LimitedHong Kong
Payment services and e-commerce
solutions in the Asian region

MajorshareholderDigital Garage, Inc., 58.5%

Place of listing

Hong Kong Stock Exchange (HKEx 1390)

Progress and expected timeline
4/23

SOA regarding the acquisition of shares was approved at thecourt meeting and the general meeting of econtext Asia Limited

6/2

High Court hearing of the petition for the sanction of the

6/3

Effective Date(expected date)(expected date)

6/4(expected date)

Scheme of Arrangement

Withdrawal of the listing of the shares on the Hong Kong Stock
Exchange becomes effective ( 9am Hong Kong Time)※ Expected to become fully consolidated from 4Q in DG’sconsolidated earnings results for FY15
Copyright © 2015 Digital Garage, Inc. All Rights Reserved

9Quarterly Profit and Loss (Consolidated)
JPY in Million

FY14.6
1Q

2Q

FY15.6
3Q

4Q

1Q

2Q

3Q

Net sales

7,273

8,349

8,271

9,857

8,126

9,760

8,377

Incubation

927

1,467

755

2,325

1,035

1,987

697

Marketing

3,068

3,557

4,012

4,184

3,669

4,111

4,003

Payment

3,277

3,326

3,503

3,346

3,421

3,661

3,675

86726

374

1,421398

1,341461

Incubation△ 77548△ 48

1,222781,060△8Marketing136

199

308

210

245

281

317

Payment

203

260

415

322

316

273

397

Ordinary income

473

1,214

810

1,944

1,173

2,290

929

Net income

389

1,037

446

974

780

2,726

571

EBITDA

970

1,956

1,207

2,473

1,618

4,961

1,437

Amortization

191

204

170

191

171

217

182

Operating income

Note: Interest expense, depreciation, and amortization are added back to income before income taxes to calculate EBITDA.
Op income per segment is based on figures prior to elimination or group deduction.
Copyright © 2015 Digital Garage, Inc. All Rights Reserved

10Press ReleasesDateTitle

2015.5.7

Digital Garage Invests in Website Analytics Tool Provider Chartbeat, Inc. to Support Japanese Expansion ThroughMedia Site Sales Boost

2015.5.1

Digital Garage Invests in US-Based FinTech Innovator MX Technologies - To Support Future Japan Expansion

2015.4.22

Digital Garage To Lead Capital Investment in and Support Global Expansion of Mobile App Analytics Tool Repro

2015.4.2

Open Network Lab to Enhance Its Seed Accelerator Program by Increasing Maximum Funding Size andStrengthening Support

2015.2.19

Digital Garage and Kodansha to establish a joint venture on digital content business for global expansion ofJapanese contents and new business incubations

Copyright © 2015 Digital Garage, Inc. All Rights Reserved11

Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending
on unforeseeable events or circumstances. This announcement is solely for the purpose of the investors relationship and is not for making any solicitation for investment inany securities. This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in whichsuch offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any securities of our consolidated
subsidiaries have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of the U.S. Securities Act. Any public offering of securities to be made in the United States will bemade by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements.